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Shareholders Blast Blockbuster In Class Action Suit

Law360 (November 11, 2005, 12:00 AM EST) -- Movie retailer Blockbuster’s attempt to expand its in-store and internet business has shareholders fuming, prompting a class action suit that alleges the company was not sufficiently prepared to take on as many new initiatives as it did.

"Defendants failed to disclose that Blockbuster was wholly unprepared to build the technological infrastructure required to integrate its in-store and online sales operations and otherwise execute the company’s transformation," the complaint argues. "Moreover, the company’s core in-store rental operations were not generating sufficient cash flow to fund Blockbuster’s investment...
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